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The 2020 Public Services Trust Blog

Friday, February 19, 2010

Rumble of the Wonks

By Henry Kippin

Buried in the Financial Times today is an interesting piece by Quentin Peel on a row erupting in Germany over the extent and scope of the welfare state.  He writes that

“It is a classic debate between liberals, conservatives and social democrats over the right and wrongs of welfare for the long-term unemployed, and about who pays to fund Germany’s generous but over-burdened system.”

Worth a quick read, if you can tear yourself away from the Royal Rumble of letters going on between of the most prominent UK & international economists.  Two letters in the FT today (including Skidelsky & Stiglitz as signatories) to rebut one in the Sunday Times – and most remarkably, each shadowing a distinct party line on appropriate timing.  So after months of trying to convince the voters of distinct dividing lines, it looks like the economists have done the job for the parties. 

I am not an economist (big disclaimer), but after reading Shiller, Taleb etc last year I would be deeply suspicious of the ability of either side to predict with anything with certainty – though that seems to be instinctively closer to today’s position than Sunday’s.  Tim Harford has written saying something similar, but (perhaps sensibly) doesn’t take sides.  The FT leader, however, was much stronger – read here

hat tip: Alisdair & Becca

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Posted by Henry Kippin at 6:43 pm
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Friday, May 22, 2009

Conditionality 2020

By Henry Kippin

James Purnell spoke at the 2020 PST yesterday, giving his take on the future of welfare in Britain.  I thought he spoke well and had some sound ideas, even if the gathered press seemed more interested in his denial of alleged tax avoidance…

 

His vision was of a ‘proactive welfare state’:  “An active welfare system alone simply requires people to work.  A proactive Welfare State seeks to create those jobs and opportunities.  It is based on supportive conditionality and it requires up front investment.” 

 

This effectively means more active labour market policies, and an emphasis on lowering the barriers to work.  To this end, the Secretary of State argued that “universal childcare is the foundation of the Scandinavian welfare systems which progressives in the UK rightly aspire to.  In these countries support is both more generous and more conditional, where investment in people is the route to higher employment and lower child poverty.“

 

But as my colleague pointed out after the speech, the trade-off for this (in Scandinavia at least) is public acceptance of a higher level of personal taxation.  Whether the UK is ready to go down this road is certainly up for debate…

 

One other phrase that stuck in my mind during the speech was ‘supportive conditionality’.  The Secretary of State argued that welfare conditionality was necessary, but should be cushioned by a raft of supply and demand-side measures – matching “responsibilities to real power and opportunities.”  This is a re-balancing act that gets to the very heart of the relationship between citizen and state in all kinds of areas, not only welfare.     

 

Conditionality has always been a loaded phrase for those working in international and development politics.  So I was intrigued to see an article in World Politics Review (published the same day) on the new, relaxed ‘International Monetary Fund 2.0’. 

 

The article suggests that the IMF is “repositioning itself as a lender for crisis prevention more than crisis resolution. The fund (has) created a new lending instrument known as the Flexible Credit Line…aimed at reassuring international investors by injecting essentially condition-free equity into qualifying countries with strong records of macroeconomic performance.

 

A cynic would suggest the Fund is simply taking advantage of a captive new western market (or indeed serving the very countries that capitalise it), but, apparently, “conditionality reforms for lower-income countries are planned for release this summer.

 

Lessons from both Purnell and Strauss-Khan?  One is that conditionality can only work when responsibility and agency are shared.  There will generally be a sharp power imbalance between those who need welfare support, and those institutions who are delivering it – but the whole point is that this support should start to redress this imbalance, affording citizens (or even states) the means to demand more and better from themselves, or even leave the system altogether.

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Posted by Henry Kippin at 9:43 am
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Friday, May 15, 2009

Follow the money

By Henneke Sharif

I’m eagerly awaiting one of the most exciting ideas on the policy scene soon to come out of Demos. Philip Blond’s ideas on recapitalising the poor.

“Follow the money. Always follow the money.” One of the best lines in movie history from All The President’s Men. Deep Throat gave us a lesson that all politicians have now as an axiom – if you want the truth, follow the money.

What Philip and Richard Reeves are recognising explicitly is that if we really want the poor to have power, the answer’s money. It’s not a new idea – ippr did a great piece of work on asset based welfare a few years ago. But the closest it got to policy was the Child Trust Fund. Might Philip hit third base with this one?

And, if it does make it into policy, what will it mean? See the Demos blog for a really good debate on this. Meanwhile, Conservative policy on schools includes a pupil premium – proper money which will follow poor kids and so give them power for the first time in the school system. Follow the money.

It makes you ask what we’ve been doing so far – finding ways of making the welfare system work for the disadvantaged, or simply finding ways of managing them at a convenient arms length.

At the 2020 we have sessions coming up with Alan Milburn on social mobility, and Philip Blond on the implications of his ideas for public services. It will be very interesting to hear what they have to say.

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Posted by Henneke Sharif at 4:22 pm
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